Charitable Gift Annuity
Did you know…
A charitable gift annuity can provide you with tax-advantaged income far greater than CDs, stock dividends or bonds. Not only that, but they generate an immediate charitable income tax deduction upon creation.
Here’s an example:
An 80-year-old woman acquired a stock many years ago for $1,000. The stock had grown in value and was now worth $10,000. She was ready to sell the stock but did not want to pay the capital gains on the $9,000 of growth. In addition, she also wanted to increase her annual income and do something for the community. After discussing her situation, we recommended that she establish a charitable gift annuity with the stock. By doing this, she achieved the following results:
- An 7.5% annuity for her entire life ($750, per year). If she lives for 12 years, the annuity payments together with the benefit of the tax deductions exceed her original contribution.
- An immediate charitable income tax deduction of $4,780.
- Deferral of the capital gains tax on the stock.
- Upon her death, an endowment will be created within the Foundation that will permanently support the community upon her passing.
Foundation Charitable Gift AnnuityExample of Single-Life $10,000 Gift Annuity
April 2021 AFR 1.0%
Age Rate Total Annual Payment Tax-Free Payment Immediate Tax Deduction 70 5.1% $510 $416 $3,348 80 6.8% $680 $569 $4,602 90 9.0% $900 $779 $6,105
If a donation scenario like this one sounds appropriate for you, the Jewish Community Foundation has the experience and technical expertise to help. The Jewish Community Foundation can:
- Simplify the process of contributing highly-appreciated, non-publicly traded assets
- Help you realize the most favorable tax consequences with the greatest charitable impact
- Work with you and your advisor to prepare and plan for contributions in advance of a liquidity event